Fair use and the removal of data roaming charges

The Connected Continent Regulation was widely celebrated as a victory for net neutrality and data roaming Europeans. Although credited for removing data roaming charges across Europe, the actual proposal for a regulation did no such thing. For most people (and MEPs especially), the removal of roaming charges is a very welcome initiative, but if it sounds too good to be true, it probably is:

Article 6a
Abolition of retail roaming charges
With effect from 15 December 2015, roaming providers shall not levy any surcharge in comparison to the charges for mobile communications services at domestic level on roaming customers in any Member States for any regulated roaming call made or received, for any regulated roaming SMS/MMS message sent and for any regulated data roaming services used, nor any general charge to enable the terminal equipment or service to be used abroad.

Yes, roaming charges will be  removed, but the concept of “fair usage” is added instead. Article 6b of the new proposal states the following:

1.  By way of derogation from article 6a, and to prevent anomalous or abusive usage of retail roaming services, roaming providers may apply a ‘fair use clause’ to the consumption of regulated retail roaming services provided at the applicable domestic price level, by reference to fair use criteria. 

What are these fair use criteria then? No one knows.  The Body of European Regulators for Electronic Communications (BEREC) will lay down some “guiding principles” for how they should be applied by the end of this year, but this will probably not affect pricing significantly.

Why is the removal of roaming charges, a development which would benefit consumers all over Europe, so hard? What are the problems associated with removing data roaming charges?

The short version: because the telecommunications industry doesn’t like it.

The long version:

1. Mobility is uneven.

Certain telecom networks would be put under much more stress than others. For example, France is one of the most visited countries in the world in terms of tourists. This means that French telcos would be put under much more stress than telcos in less-visited countries. If no restrictions apply, people would probably use their phones as much as  at home.

2. Pricing is uneven.

In Finland, TeliaSonera offers 10 GB of data and free roaming in the Nordic countries as well as the Baltic countries for 20€/month at a speed of 21 mbps. In Sweden, TeliaSonera offers 10 GB of data at full 4G for 599 SEK (70€) but only inside Sweden’s borders. Same company, completely different price level. This means that if the telecommunications market were truly single, telcos would have to compete on a European level – same prices everywhere. According to market logic, this would drive prices down.

Critics of the proposal to remove all charges say that such a development would likely drive prices up nationally especially in smaller countries, since the telecoms would have to find new sources of income.  But if the market were truly single, there would be no such thing as “national markets” and thus a telco from France could offer their services to Swedish citizens.

3. Roaming is profitable.

According to a study by Informa Telecoms & Media, European companies made $19.7 billion in roaming fees in 2013. Few telcos would like to see that cash cow go.

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